“China’s Facebook Syndrome” and another story

There’s an article on Bloomberg Businessweek on Facebook and China:

“Since 2009, China has blocked Facebook, the world's largest online social media network. This year, Renren, one of China's largest social networks, plans to raise $500 million on the New York Stock Exchange. So a Chinese social network can tap U.S. capital markets, but American social networks can't tap Chinese consumer markets. Does that sound fair?”

This reminded me of a something else that is brewing in China regarding electronic payment processing – the US has formally appealed to the WTO over China’s Unionpay having a monopoly over electronic payments. The gist is that in China, customers who wish to pay for their purchases electronically or withdraw money from an ATM machine are generally required to own cards issued by China’s Unionpay in order for the payment/withdrawal to be processed (read more here and here). This is despite Unionpay being accepted overseas - i’m sure many would recognise its logo – and sounds completely like Facebook being banned in China but Renren being able to be accessed outside of China.

Of course, larger merchants like hotels (I’ve never had problems paying for accommodation even in domestically-owned hotels) and those in the larger cities (my friend has shopped and paid via card in Beijing, Shanghai, Guangzhou, etc) accept Mastercard/Visa. However, my guess is that they have to pay extra to provide this service. Frankly, I wouldn’t have blinked when I heard the news about the US appealing a dispute until I was in Hefei, Anhui the other day and trying to pay for a really pretty winter coat (on 40% off!) at Mo&Co De Paris only to have both my Visa and Mastercards rejected. I managed to buy the coat in the end – thanks to there being someone I could borrow money from – but otherwise tourist dollars would have been lost, as I couldn’t have been able to withdraw money from the ATMs either.

Lesson learnt from this experience – bring more money when travelling to the lesser known/developed Chinese cities! They might have new shiny malls with expensive shops like Korean fashion brand Roem where a dress costs SGD180 or a jewellery/accessories shop that had SGD1000 crystal-studded shoes in its display case, but no cashless payment available!